BANK and building society account holders are being punished for their loyalty by better rates being given to new customers.

People who already bank with Lloyds TSB are offered a rate of between 0.1 per cent and 3.15 per cent on their current account - but anyone who signs up from October 1 could get 4.2 per cent.

You have to be pretty well-off to qualify for the extra interest - it only applies to new customers paying in more than #2,000 a month, but new Lloyds customers who pay in more than #1,000 a month will get 3.53 per cent, compared with 2.5 per cent for customers who have been with the bank for longer.

Current accounts are not the only way banks penalise customers.

Savings accounts often have extra interest added for the first year - but getting your new account at the wrong time could leave you worse off.

Lambeth Building Society always offers a bonus on its Access Plus account, but new savers will get a better deal if they sign up at Christmas. A spokesman said: "The bonus we offer is varied, but around Christmas time it goes up to about 1.5 per cent." Which means that savers who open an account at any other time of the year don't get the best deal.

Thousands signed up for the Scottish Widows Instant Transfer account when it was launched in 1995. Three years later their decision to stick with the bank was thrown in their face when extra interest was offered to anyone opening a new account. Northern Rock also offers a bonus of 0.4 per cent on its Tracker Online account launched in 2001.

It also offered a bonus at launch, but the extra interest was dropped five months later. The bank reintroduced the incentive in March this year after fewer customers signed up without the added interest.

MIRROR MONEY ADVICE: Keep an eye out for new and better deals. The only way to stop banks taking advantage of loyal custom is to stop being loyal.